In its second-largest acquisition, Amazon buys the company for $970 million.
Earrings made from old beer bottles? Hipcycle zeros in on customers with a passion for them.
Having launched online two years ago, Hipcycle LLC quickly gained national exposure as a seller of everyday products like earrings, lamps and clocks made from such things as recycled railroad parts, glass bottles and vinyl records. In its quest to appeal to buyers of eco-friendly products that help limit the expansion of waste landfills, it has made the airwaves and news pages of media outlets like NBC-TV’s “The Today Show” and The New York Times.
“We’re an e-commerce site that’s diverting wasted materials away from landfills—people get passionate about that topic and about us,” founder and CEO Andrew Sell says.
But to build its brand over the long term and develop a steady following of customers, he adds, Hipcycle is forging ahead with e-mail marketing campaigns with content tailored to the interests of individuals who visit its retail e-commerce site, Hipcycle.com. “We’ve had great success with traditional media,” he says, “but to really increase our traffic and grow our brand, we need to take tactics like this.”
Hipcycle operates as an independent company operating on its own revenue with some financial backing from friends and family, says Sell, who worked in sales and marketing in the health care and social services fields before founding Hipcycle. The retailer has annual sales in the “low six figures,” but sales are running 75% or more higher this year over last year, he adds.
Determined to grow steadily without overly investing in technology systems, Sell launched Hipcycle.com on the free open-source Magento Community Edition e-commerce platform, with assistance from web developer Sellry. Magento is part of eBay Inc.’s X.Commerce e-commerce technology unit. Open-source software makes the software code available to developers for modifications.
Hipcycle also operates a business-to-business e-commerce site, FunkyJunkRecycled.us. With only about 75 product SKUs, Sell decided to run that site on an e-commerce platform hosted on the Internet by Shopify Inc. For Hipcycle.com, which is a relatively more complex site with about 1,000 SKUs, Sell says he opted for the wider range of site functionality that he says Magento provides. Those features include being able to plug in a checkout page application that provides for such features as multiple product views, cross-selling other products and links to social media pages. Hipcycle also works with ShipStation to print out shipping labels and forward orders to delivery companies.
To build its customer base and sales, Hipcycle is using web analytics, data management and e-mail marketing services from Nectar Online Media Inc., which is enabling the retailer to target e-mail marketing campaigns to registered customers based on their browsing behavior on Hipcycle’s web sites and their responses to prior e-mail campaigns.
“We’re consistently seeing sales of whatever we’re pitching in e-mail go up,” Sell says. To customers who had browsed Hipcycle’s carrying bags, for example, the retailer sent out an e-mail under the subject line, “Upcycle fire hose products.” That resulted in a click-through rate of about 30% for offers of messenger bags and tote bags made of firehose material, Sell says. “If you put a firehose in a landfill, it never goes away, but that same material makes it a great product,” he says.
Nectar provides its own e-mail marketing services to Hipcycle, though it can also integrate its analytics and data management applications with third-party e-mail services providers, says Nectar founder and CEO Amrit Kirpalani.
Nectar’s e-mail services to Hipcycle include building e-mail templates designed with product images as well as targeting e-mail to recipients based on their known online shopping interests. Compared with its prior e-mail campaigns not driven by Nectar, Hipcycle has experienced increases of 150% in e-mail click-through rates and 35% in conversions, Sell says.
Hipcycle is also planning to work with Nectar’s analytics data to personalize web content, in time for this year’s holiday shopping season, for site visitors based on their prior browsing behavior as well as their responses to e-mail campaigns, Sell says. “Our next step is to customize what the customer sees when she comes out our web site,” Sell says.
The cost to use Nectar’s analytics and other services starts at about $1,000 per month, but can go into five figures based on volume of customers, Kirpalani says.